Question

• What valuable lessons can the accounting community (incl. reporting entities and regulators), learn from the outcomes of Enron Scandal (2001).( write 500 words )

Answer 1

1. You make money in the new economy in the same ways you make money in the old economy - by providing goods or services that have real value.

2. Financial cleverness is no substitute for a good corporate strategy.

3. The arrogance of corporate executives who claim are the best and the brightest, "the most innovative," and who present themselves as superstars should be a "red flag" for investors, directors and the public.

4. Executives who are paid too much can think they are above the rules and can be tempted to cut ethical corners to retain their wealth and perquisites.

5. Government regulations and rules need to be updated for the new economy, not relaxed and eliminated.